Detailed explanation of tariff guarantee insurance and cross-border e-commerce import tariff policy

Overview of Customs Guarantee Insurance

Tariff guarantee insurance is an innovative tariff guarantee mechanism that allows companies to enjoy the convenience of “release first and then pay taxes” when goods are cleared through customs with “one policy”. Specifically, this form of insurance takes the consignor and consignor of import and export goods as the insured and the customs as the insured. Once an import and export enterprise fails to pay customs duties on time, the insurance company will compensate the customs for the tax payable according to the insurance contract, thereby ensuring national tax security.

Policy background and development trends

On October 31, 2018, the China Banking and Insurance Regulatory Commission (CBIRC) and the General Administration of Customs jointly issued the “Announcement on Launching a Pilot Program for Customs Clearance Business of Tariff Guarantee Insurance”, announcing that the customs clearance services of customs guarantee insurance previously offered in ten regions would be The pilot was expanded nationwide. Insurance companies participating in the pilot include PICC Property & Casualty Co., Ltd., China Pacific Property & Casualty Insurance Co., Ltd. and Bank of China Insurance Co., Ltd. As of the end of 2018, a large number of enterprises have benefited from this reform, which has not only reduced operating costs but also improved capital turnover efficiency.

Cross-border e-commerce retail import tariff and tax adjustments

In order to adapt to market changes, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation jointly issued the “Notice on Improving the Tax Policy for Cross-Border E-Commerce Retail Imports” on November 30, 2018, adjusting the cross-border e-commerce retail import tariffs. Policy, the main contents include: Increase the single transaction limit from 2,000 yuan to 5,000 yuan, and increase the annual transaction limit from 20,000 yuan to 26,000 yuan; for products that exceed the single transaction limit but are lower than the annual transaction limit, if the order is for only one product , then the goods can be fully taxed according to the goods tax rate.

In addition, the notice also emphasizes that imported goods purchased through e-commerce are final goods for consumers’ personal use and may not be resold in the domestic market.

Import tariff calculation method

According to the latest tax policy, the tariff rate for cross-border e-commerce retail goods imported within the limit is temporarily set to 0%, while the import value-added tax and consumption tax are levied at 70% of the statutory tax payable. The calculation formula is: tax = purchase unit price × number of pieces × cross-border e-commerce comprehensive tax rate, where cross-border e-commerce comprehensive tax rate = [(consumption tax rate + value-added tax rate) / (1 – consumption tax rate)] × 70%.

Basic tasks and nature of customs

The “Customs Law of the People’s Republic of China” clearly stipulates the nature of the customs as the national entry and exit supervision and management agency and its basic tasks such as supervision, tax collection, anti-smuggling and statistics. In addition, the customs is also responsible for intellectual property protection, anti-dumping and countervailing investigations, etc.

Conclusion

Adjustments to tariff guarantee insurance and cross-border e-commerce import tariff policies aim to promote trade facilitation, reduce costs and improve efficiency. These measures are of great significance in promoting the development of new cross-border e-commerce formats.